Rupert Murdoch is going back to his roots, taking up the role of chairman of News Corp's Australian arm with the current local chairman and chief executive stepping down, as the publisher battles a hostile government.

Murdoch announced on Wednesday News Ltd Chairman and Chief Executive John Hartigan, a veteran journalist, was retiring and would be replaced in December by the head of pay-TV provider Foxtel.

The only interesting thing in the move is Rupert Murdoch is getting fully involved in all parts of the business instead of stepping away as some had thought, said Rhett Kessler, fund manager at Pengana Australian Equities Fund, referring to calls for Murdoch to move away from the business after the phone hacking scandal in UK.

Pengana Australian Equities fund owns News Corp shares.

The incoming CEO Kim Williams, 59, comes into the job facing a government that has slammed News Corp's Australian dailies over their political coverage and has scrapped a tender for broadcasting Australian TV into Asia, which News Corp's part-owned Sky News was tipped to win.

The government has also launched a probe into media laws in the wake of the News Corp phone hacking scandal in Britain.

Williams has headed Australia's largest pay TV business, Foxtel, which is partly owned by News Corp, for 10 years.

In his new role, Kim will be responsible for building a strong leadership position for News Limited in digital in Australia, Murdoch said in a statement.

Williams was sanguine about the prickly relations News Corp has with the government.

Clearly there are a number of people within the government we appear to have a poor relationship with, he told Sky TV after his appointment was announced.. I think that any media organisation that is doing its job will from time to time will have very hostile reactions from those that it covers and scrutinises, he said.

(Reporting by Sonali Paul; Editing by Ed Davies and Lincoln Feast)